January 3, 2007

Host: Michael Grant

Chandler Immigration

The City of Chandler is among local municipalities appealing to the state and federal government for immigration reform. Current Chandler Mayor Boyd Dunn and former Chandler Mayor currently State Senator Jay Tibrshraeny join Michael Grant in the studio.

Michael Grant:
Tonight on "Horizon," as Congress in the state's legislature poised to begin new sessions, Arizona cities ask the state and federal government for immigration reform. We hear one cities appeal to national leaders. Plus, Arizona's new minimum wage increase went into effect on Monday. What will some of the impacts be on businesses throughout the state. We'll have those stories up next on "Horizon."

Announcer:
"Horizon" is made possible by contributions from the friends of eight, members of your Arizona PBS station thank you

Michael Grant:
Good evening. I'm Michael Grant. Welcome to "Horizon." As a border state, immigration, of course a major issue in Arizona. Many cities have to cope with immigration-related issues at the local level. Some of the problems that city of Chandler officials say they have to deal with have to do with the impact of day laborers gathering on the streets as they look for jobs. Another issue Chandler officials say they have to bear are the associated costs of illegal immigration on the public safety system. Recently the mayor of Chandler and state senator representing Chandler's legislative district 21 joined in asking the White House and Congress for meaningful immigration reform. Joining us now is Chandler Mayor Boyd Dunn and Senate majority whip Jay Tibshraenyi. Gentlemen happy holidays to you. Happy New Year.

Boyd Dunn:
Thank you, Michael. Same to you

Michael Grant:
Mayor, I just touched on a couple. But what are some of the major problems Chandler is facing?

Body Dunn:
Well, the basic concept is that city's are caught in the middle, in terms of dealing with the effects of illegal immigration, the effects of day laborers. We're the ones that are dealing with the workers trying to find jobs in our communities and we're asked to do something about and the bottom line is we don't have that authority. We're not in the business of enforcing immigration law and to a great extent we don't know what the immigration law is. So I think the senator and I, and the senator being a former mayor of the city of Chandler, feel that this is an opportunity with the new congress coming on board to finally say to congress, come up with a comprehensive immigration reform that touches all aspects and define what it is so we can all act accordingly.

Jay Tibshraeny:
Yes.

Michael Grant:
Chandler impacted more than other Valley cities? Or is this, you know, is this a pretty even tie?

Jay Tibshraeny:
It's a pretty even tie. We both wanted to weigh in because of our experience with immigration issue, both me locally and also on the senate side. We felt the election offered a good opportunity to maybe reiterate in writing to our new congressional representatives that this was a big issue in November -- Iraq and immigration and we think that they need to address. He has done stuff at the city level but that's been a band-aid. We at the state have done things that we thought were good things but we're dealing with the symptoms. Without the federal government getting involved with comprehensive immigration reform, anything he does or we do will not be addressing the root of the problem. That's why we said let's put something in writing. There's kind of been a mandate from the citizens that they want action on this issue. And we're calling on them to help take the lead.

Michael Grant:
The mandate doesn't quite capture it. All four of the immigration-related proposals clearing by at least 70 percent, and sometimes approaching 80 percent.

Jay Tibshraeny:
The message is clear from the voters. Those ballot measures as you mentioned passed overwhelmingly and if we'd had a few more on there they would have passed overwhelmingly. They want to see some action. Again we think the federal government needs to deal with some comprehensive reform dealing with securing the borders, verification of employees and who employers know are here illegally. Then also dealing with the issue of what do you do with the 10 to 12 million people that are here? We'll continue to do our things at the state and the city level, but without their participation -- and that's what we're asking for is participation, and that's what we're asking for is participation, I think a lot of rhetoric was given on this issue over the last few years at the federal level, but not a lot of action And I think there's a call for the new congress to get engaged with us and work with us

Michael Grant:
Mayor, what specifically, and who for that matter, did you address the letter to? And what specifically did you ask for?

Boyd Dunn:
We addressed the letter to currently the members of Congress, especially the new members that were recently elected in Arizona and also to the White House again. You know, this is not the first time we've kind of proposed this message and again, I'm not speaking outside of what the mayors throughout the Valley feel very strongly about. We all have this issue. People see the day laborers in all of our communities and some of us have tried to address it. We were one of the first cities to have a day labor center privately funded without taxpayers' money but still what we're finding is the employers are the ones who are concerned about using such services so we feel very strongly as the senator indicated, that this is an issue that federal government needs to step in and deal with all aspects of the issue. Not only securing the border, which we hear from everyone, but also addressing the other items. So I've communicated with the senator, certainly Senator Kyl, Senator McCain, Representative Flake, all have proposals that they've made last year and then had a couple opportunities to sit down with the staff that was trying to come up with the aspects of what the president would propose because from my aspect I was mostly concerned about any mandates that would be coming down to the cities in terms of enforcement. So we're just saying this is the opportunity. New Congress, and if we're going to do anything, we feel strongly it needs to be done in the next few months.

Michael Grant:
Certainly one of the most controversial aspects of comprehensive immigration reform, the McCain-Kennedy approach -- and here if you want to run down the issue you call it amnesty if you want to talk up the issue you call it a pathway to citizenship. Opponents are concerned, though, that -- they're fearful of sending the same -- and I think what a lot of people agree was a bad message in the mid 1980's, and you don't give people really incentive to follow the next law that you pass.

Boyd Dunn:
Right. It's not an easy problem to solve. But clearly amnesty is not the solution but neither is deporting 10 million people. It's impossible to do there's going to have to be some kind of compromise, middle-of-the-road thing. Should they be penalized? Yes, they broke the law and they need to be penalized. How that penalty works, how it takes place, that's something that we need help at the federal level. We're not going to figure that out at the state level but it's going to be something along what the McCain-Kennedy bill did and that's not a bad thing. That bill had widespread support even among conservative members of my party; Congressman Jeff Flake supported that bill and parts of that bill. So we need to look at solving the problem and not finding reasons not to solve the problem. So there's going to be -- there's going to have to be some kind of work program in place so that people that want to work -- and we have many jobs that these people are taking that can't be filled -- that there's a way to do it in a legal way . Then we have to deal with those that are here illegally and how are we going to do that? There's going to be penalties, sanctions, fines but I don't think mass deportation will be the answer to that.

Michael Grant:
Yeah how do you put -- I mean, a lot of people say, hey, give me a break, employers you know you're hiring illegal's a lot of employers respond, well, actually we don't know that we may suspect it how do you put that together with the package with both sanctions as well as probably some sort of -- certainly a more reliable verification system for employers?

Boyd Dunn:
You know, I think there are some situations where employers probably know that likelihood that there's an undocumented worker involved is pretty high but the key is, they're afraid of doing something that is illegal and so they're not going to be willing to work with cities or work with anyone in terms of -- something that's feasible so with the guest worker program the government defines exactly what the criteria is and how long this individual can be herein and how hiring this individual will fit within the law then I think both sides of the equation would be covered

Michael Grant:
Can you have effective enforcement of that though? I mean, there's tremendous trafficking just in false documents and I don't know if you come up with a new guest worker program that you aren't going to have a new false document guest worker program ID system

Boyd Dunn:
That seems to be the issue I think what we hear are constant ex excuses of why we can't do something it's going to be a tough nut to crack, a very difficult debate but you have to do it otherwise you let the status quo continue I think the voters are saying the status quo is not acceptable

Michael Grant:
Are we seeing some improvements by the federal government in their local --both border security and also enforcement assistance?

Jay Tibshraeny:
We're hoping so with the new I.C.E. person bull I can't say that I've seen it maybe he at the local level but there was a period of time, both when I was mayor and probably while he was mayor, where I actually thought they had disappeared they weren't there to answer our calls and to deal with it because I think it was such a political hot potato that their field people at least were not responding to the multitude of calls dealing with illegal immigration

Michael Grant:
Have you seen an improvement in that situation?

Boyd Dunn:
We hope so with the new director coming onboard we're getting signals they understand they need to be there the reason given, even the local law enforcement -- we contacted I.C.E. I and said, hey, we have a situation here that we need to deal with, we need to turn it over to you they would use border enforcement as a reason not to be there because they have most of their personnel dealing with that issue you can understand that there's only so many individuals that are involved we're seeing a difference where they want to be there but it's going to take appropriations, money--

Michael Grant:
It's going to take a ton of money

Boyd Dunn:
Senator Kyl has advocated several billions of dollars to help enforcement, help the federal government to provide those services; maybe you need specially-trained enforcement on the federal level and maybe even the state level to be able to deal with issues but spending that money may certainly be better than just letting the economies being affected otherwise

Jay Tibshraeny:
They need to be more pro-active, the border patrol they have to be more pro-active than they've been and maybe with the increase in manpower that president promised over a year ago, as that starts happening we'll see a little bit more pro-active work but I think there's a lot to be done herein

Michael Grant:
Okay Senator Jay Tibshraeny it's good to see you. Thanks for joining us.
Mayor body Dunn, thanks to you as well

Boyd Dunn:
Thank you, Michael

Michael Grant:
Until now laws regulating wage and hour regulations have been largely federal. But under proposition 200, passed by Arizona voters in November, Arizona has now added a state law that contains provisions different from the federal law some Arizona businesses have expressed their worries that the new minimum wage increase to 6.75 a hour imposes new regulatory burdens on employers and allows new claims by employees against employers more in a moment on the impact of the minimum wage increase on the general business community. First, Merry Lucero looks at how the increase could affect one Arizona industry

Merry Lucero:
There are 160 people on the payroll at Monti's restaurant in Tempe about 40\% of those are tipped employees, servers, busers and bartenders, coveted positions at an establishment like Monti's

Michael Monti:
People who start out as hosts often want to come up and become a bartender or server because they want to get their hands on those tips and someone who has a great personality and is an entrepreneurial spirit can really earn a lot of tips and so it is a type of job that attracts people who aren't going to hover at minimum wage, anyway they work their own raise by charming customers, selling more, charming customers.

Merry Lucero:
Michael Monti says those workers who now make 3.75 an hour plus their tips will not likely notice the 1.62 increase

Michael Monti:
That's going to go mostly to taxes or expenses and they're making so much more just turning the tables and making the customers happy

Merry Lucero:
And non-tipped employees already make more than the 6.75 per hour minimum wage

Michael Monti:
So what's happening now is perhaps we'll see a wage-pressure increase at the floor starting employees may think that they need more spread between the new minimum wage and what they're getting now and so ultimately that pressure will work its way up and maybe push up things a dollar here or there. I think the important thing is to bear in mind who's going to benefit from this the most. Now, there are people who work entry level jobs at other places may earn minimum wage they're the people who can least afford to pay more dime for a cup of coffee or a soda and ultimately, as much as we hate to pass these costs on, some of these costs will go through.

Merry Lucero:
And costs for a restaurant food supplies have substantially increased in recent years Arizona's restaurant industry employs nearly 200,000 people across the state.

Steve Chucri:
You could go to a mom and pop restaurant, an independent restaurant to a chain that has 18 locations in this state and they both are going to be impacted relatively the same way because when you look at the staffing level of those two examples I just gave you, an 18 store restaurant in this country or in this state is going to have a high number of hours that they're billing out for staffing a smaller restaurant is going to have obviously smaller hours but they're still going to have -- both are going to have the overhead costs, the cost of the food, the cost of their buildings so both are being impacted significantly and if you want to see actual numbers you're probably going to look at something of well over $1 million for a large chain in this state to 100 plus thousand for a smaller independent restaurant at the end of the day those amount to a significant increase to the costs of their business.

Merry Lucero:
He says layoffs could be another possible side effect another issue for the restaurant industry is how the new minimum wage amount will increase annually based on the cost of living

Steve Chucri:
Every year according to the consumer price index these employees will get raises, regardless of merit or performance or anything they may have done they may not have shown up for work and still they're going to get a raise and when you look at those, it's in no way going to describe how one restaurant performed over the year they could have lost money and now we're still going to be forced to give the raise the following year.

Merry Lucero:
Troublesome says Chucri to an industry with buildings that are a challenge to maintain--one that will contribute a projected $8 billion to Arizona's 2007 economy

Michael Grant:
Here to talk more about the effects of the new minimum wage increase on business generally is Glen Hamer. He is the president and CEO of the Arizona Chamber of Commerce. Glen thanks for being here.

Glen Hamer:
Thank you, Michael

Michael Grant:
We just focused there on the restaurant industry what other industries generally in the state most likely to be let's say most heavily impacted by this change?

Glen Hamer:
Well, the small business community in the state is very concerned about the effect of not only the increase but of the reporting requirements under the law as well as the potential for any employee or any individual to file a claim against an employer and the way this new law is drafted is that unfortunately it essentially brings the French judicial system to Arizona where an employer is presumed guilty of the offense until that employer is able to prove otherwise

Michael Grant:
Okay and I want to get back to that one but first let's focus a little bit more on the economic impact glen, a lot of people say hold it I just don't buy that this is that large an impact, a buck 50 or so an hour 5.15 is awfully low I think those people deserve a raise and I'm not really buying the theory that it's that big an impact on business what do you say to them?

Glen Hamer:
Well, as of a few years ago it was a very, very small percentage of workers that were paid the minimum wage and the majority of those individuals were under the age of 25 so most of the people who are making anywhere near the minimum wage are people at the beginning of their careers and it's a starting wage. What I would also say is that we've already seen that one of the reasons why the Arizona Chamber oppose the initiative was that out of concern that it would kill jobs; well, it's clearly already doing that we've already read stories about some people who are developmentally disabled receiving pink slips because of this new law, and others are now in a position where they may lose their jobs because their employers simply are not able to pay the new minimum wage and to keep operating

Michael Grant:
That issue was, as I understand it, I guess, under the federal minimum wage standard the legislature could pass some exemptions for certain people here these were the developmentally disabled working for some charitable organizations and apparently under the new state statute, that kind of flexibility is not available

Glen Hamer:
That is correct and I doubt that many voters going into the ballot booth had any idea that it could have the effect of turning out of work, of ending the ability for certain people to gain meaningful employment and because of the voter protection law in Arizona, the legislature may not even be able to -- to change that, even if it wished to do so

Michael Grant:
I think one of the other problems that people have with the loss of jobs argument basically goes as follows: let's take a fast food restaurant which frequently, maybe it's a part-time worker, a high school, college, whatever the case may be well, you still need -- you still need that worker how is it that paying that worker another buck and a half a hour eliminates a job? Because you still need the work activity.

Glen Hamer:
Well, you still need a certain number of workers but businesses also need to make a profit and a great concern for us is that if businesses cannot make a profit under this new minimum wage, it's going to turn into a situation where those businesses may no longer be able to operate and then an employee not only will not be receiving the increased wage, that employee will not be receiving a wage at all so it's not just an issue of can an employer -- why can't an employer just pay another dollar 50 or so per employee we need to remember that for businesses to operate, businesses need to -- need to turn a profit and it would just be tragic if smaller businesses are forced out of business because of this new law, particularly -- let's remember that it doesn't end at 6.75 as we saw from the other segment there's an escalator.

Michael Grant:
Inflation annually?

Glen Hamer:
An annual inflation adjuster in this and if the state goes into another economic rough patch, it's going to have an enormous effect on businesses of all sizes

Michael Grant:
Let me get to the new complaint procedures of this explain -- explain that and how it may impact business

Glen Hamer:
Well, if the goal of this minimum wage initiative was just to increase the minimum wage to 6.75, it probably could have been drafted with 100 words or 150 words instead the initiative has about 2,000 words in it and under the new complaint processes that any employee or virtually any party can file a complaint against an employer charging that that employer is violating the new minimum wage requirement the standards are, as I understand it, are very lacks

Michael Grant:
Could I as a customer of the business file a complaint against a business if I've got some reason to believe it's not paying the higher minimum wage?

Glen Hamer:
My understanding is that you as a customer or competitor could file a claim and it creates a very burdensome procedure where, as I understand it, for 90 days the employers' hands are completely tied in terms of what it does we could be in a situation where an employee is not performing or is on the verge of, for cause, being terminated and then that employee files a case -- files a suit under this new law and --

Michael Grant:
It sort of freezes that employee for three months or so while the allegation is investigated

Glen Hamer:
And again, for a smaller business to go through that legal process, it could, if the business is operating on a small profit margin, it could be a death sentence for that business and it doesn't just effect that particular employee who may be disgruntled it effects all of the employees in that operation

Michael Grant:
Who administers this complaint process? Is that a state agency that does that?

Glen Hamer:
Right now it is the Industrial Commission and they have put out some temporary regulations and they are working on permanent regulations and we will be doing everything we possibly can to make sure that the implementation of this new law, as unfortunate as we feel it may be, is done on a reasonable basis.

Michael Grant:
All right Glen Hamer, we very much appreciate you joining us this evening and Happy New Year to you.

Glen Hamer:
Happy New Year thank you, Michael

Michael Grant:
To see video of this and other "Horizon" segments via the internet please go to the website you'll find that at azpbs.org and you can click on "Horizon" you can also get transcripts, find out about upcoming topics.

Mike Sauceda:
Workers re-sod the field of the University of Phoenix Stadium after an incredible Fiesta Bowl game that is still being talked about. The sod is being laid to prepare for the B.C.S. Championship to be played at the city of Glendale stadium. Find out how stadium and city officials fared with the first bowl game and plans fort the second bowl game Thursday at 7:00 on "Horizon"

Michael Grant:
Thanks for joining us on a Wednesday evening I'm Michael Grant. Have a great one. Good night.

Minimum Wage Increase

How is the Arizona business community affected by the new minimum wage increase? Glenn Hamer, President and CEO of the Arizona Chamber of Commerce and Industry joins Horizon for a discussion.

Michael Grant:
Tonight on "Horizon," as Congress in the state's legislature poised to begin new sessions, Arizona cities ask the state and federal government for immigration reform. We hear one cities appeal to national leaders. Plus, Arizona's new minimum wage increase went into effect on Monday. What will some of the impacts be on businesses throughout the state. We'll have those stories up next on "Horizon."

Announcer:
"Horizon" is made possible by contributions from the friends of eight, members of your Arizona PBS station thank you

Michael Grant:
Good evening. I'm Michael Grant. Welcome to "Horizon." As a border state, immigration, of course a major issue in Arizona. Many cities have to cope with immigration-related issues at the local level. Some of the problems that city of Chandler officials say they have to deal with have to do with the impact of day laborers gathering on the streets as they look for jobs. Another issue Chandler officials say they have to bear are the associated costs of illegal immigration on the public safety system. Recently the mayor of Chandler and state senator representing Chandler's legislative district 21 joined in asking the White House and Congress for meaningful immigration reform. Joining us now is Chandler Mayor Boyd Dunn and Senate majority whip Jay Tibshraenyi. Gentlemen happy holidays to you. Happy New Year.

Boyd Dunn:
Thank you, Michael. Same to you

Michael Grant:
Mayor, I just touched on a couple. But what are some of the major problems Chandler is facing?

Body Dunn:
Well, the basic concept is that city's are caught in the middle, in terms of dealing with the effects of illegal immigration, the effects of day laborers. We're the ones that are dealing with the workers trying to find jobs in our communities and we're asked to do something about and the bottom line is we don't have that authority. We're not in the business of enforcing immigration law and to a great extent we don't know what the immigration law is. So I think the senator and I, and the senator being a former mayor of the city of Chandler, feel that this is an opportunity with the new congress coming on board to finally say to congress, come up with a comprehensive immigration reform that touches all aspects and define what it is so we can all act accordingly.

Jay Tibshraeny:
Yes.

Michael Grant:
Chandler impacted more than other Valley cities? Or is this, you know, is this a pretty even tie?

Jay Tibshraeny:
It's a pretty even tie. We both wanted to weigh in because of our experience with immigration issue, both me locally and also on the senate side. We felt the election offered a good opportunity to maybe reiterate in writing to our new congressional representatives that this was a big issue in November -- Iraq and immigration and we think that they need to address. He has done stuff at the city level but that's been a band-aid. We at the state have done things that we thought were good things but we're dealing with the symptoms. Without the federal government getting involved with comprehensive immigration reform, anything he does or we do will not be addressing the root of the problem. That's why we said let's put something in writing. There's kind of been a mandate from the citizens that they want action on this issue. And we're calling on them to help take the lead.

Michael Grant:
The mandate doesn't quite capture it. All four of the immigration-related proposals clearing by at least 70 percent, and sometimes approaching 80 percent.

Jay Tibshraeny:
The message is clear from the voters. Those ballot measures as you mentioned passed overwhelmingly and if we'd had a few more on there they would have passed overwhelmingly. They want to see some action. Again we think the federal government needs to deal with some comprehensive reform dealing with securing the borders, verification of employees and who employers know are here illegally. Then also dealing with the issue of what do you do with the 10 to 12 million people that are here? We'll continue to do our things at the state and the city level, but without their participation -- and that's what we're asking for is participation, and that's what we're asking for is participation, I think a lot of rhetoric was given on this issue over the last few years at the federal level, but not a lot of action And I think there's a call for the new congress to get engaged with us and work with us

Michael Grant:
Mayor, what specifically, and who for that matter, did you address the letter to? And what specifically did you ask for?

Boyd Dunn:
We addressed the letter to currently the members of Congress, especially the new members that were recently elected in Arizona and also to the White House again. You know, this is not the first time we've kind of proposed this message and again, I'm not speaking outside of what the mayors throughout the Valley feel very strongly about. We all have this issue. People see the day laborers in all of our communities and some of us have tried to address it. We were one of the first cities to have a day labor center privately funded without taxpayers' money but still what we're finding is the employers are the ones who are concerned about using such services so we feel very strongly as the senator indicated, that this is an issue that federal government needs to step in and deal with all aspects of the issue. Not only securing the border, which we hear from everyone, but also addressing the other items. So I've communicated with the senator, certainly Senator Kyl, Senator McCain, Representative Flake, all have proposals that they've made last year and then had a couple opportunities to sit down with the staff that was trying to come up with the aspects of what the president would propose because from my aspect I was mostly concerned about any mandates that would be coming down to the cities in terms of enforcement. So we're just saying this is the opportunity. New Congress, and if we're going to do anything, we feel strongly it needs to be done in the next few months.

Michael Grant:
Certainly one of the most controversial aspects of comprehensive immigration reform, the McCain-Kennedy approach -- and here if you want to run down the issue you call it amnesty if you want to talk up the issue you call it a pathway to citizenship. Opponents are concerned, though, that -- they're fearful of sending the same -- and I think what a lot of people agree was a bad message in the mid 1980's, and you don't give people really incentive to follow the next law that you pass.

Boyd Dunn:
Right. It's not an easy problem to solve. But clearly amnesty is not the solution but neither is deporting 10 million people. It's impossible to do there's going to have to be some kind of compromise, middle-of-the-road thing. Should they be penalized? Yes, they broke the law and they need to be penalized. How that penalty works, how it takes place, that's something that we need help at the federal level. We're not going to figure that out at the state level but it's going to be something along what the McCain-Kennedy bill did and that's not a bad thing. That bill had widespread support even among conservative members of my party; Congressman Jeff Flake supported that bill and parts of that bill. So we need to look at solving the problem and not finding reasons not to solve the problem. So there's going to be -- there's going to have to be some kind of work program in place so that people that want to work -- and we have many jobs that these people are taking that can't be filled -- that there's a way to do it in a legal way . Then we have to deal with those that are here illegally and how are we going to do that? There's going to be penalties, sanctions, fines but I don't think mass deportation will be the answer to that.

Michael Grant:
Yeah how do you put -- I mean, a lot of people say, hey, give me a break, employers you know you're hiring illegal's a lot of employers respond, well, actually we don't know that we may suspect it how do you put that together with the package with both sanctions as well as probably some sort of -- certainly a more reliable verification system for employers?

Boyd Dunn:
You know, I think there are some situations where employers probably know that likelihood that there's an undocumented worker involved is pretty high but the key is, they're afraid of doing something that is illegal and so they're not going to be willing to work with cities or work with anyone in terms of -- something that's feasible so with the guest worker program the government defines exactly what the criteria is and how long this individual can be herein and how hiring this individual will fit within the law then I think both sides of the equation would be covered

Michael Grant:
Can you have effective enforcement of that though? I mean, there's tremendous trafficking just in false documents and I don't know if you come up with a new guest worker program that you aren't going to have a new false document guest worker program ID system

Boyd Dunn:
That seems to be the issue I think what we hear are constant ex excuses of why we can't do something it's going to be a tough nut to crack, a very difficult debate but you have to do it otherwise you let the status quo continue I think the voters are saying the status quo is not acceptable

Michael Grant:
Are we seeing some improvements by the federal government in their local --both border security and also enforcement assistance?

Jay Tibshraeny:
We're hoping so with the new I.C.E. person bull I can't say that I've seen it maybe he at the local level but there was a period of time, both when I was mayor and probably while he was mayor, where I actually thought they had disappeared they weren't there to answer our calls and to deal with it because I think it was such a political hot potato that their field people at least were not responding to the multitude of calls dealing with illegal immigration

Michael Grant:
Have you seen an improvement in that situation?

Boyd Dunn:
We hope so with the new director coming onboard we're getting signals they understand they need to be there the reason given, even the local law enforcement -- we contacted I.C.E. I and said, hey, we have a situation here that we need to deal with, we need to turn it over to you they would use border enforcement as a reason not to be there because they have most of their personnel dealing with that issue you can understand that there's only so many individuals that are involved we're seeing a difference where they want to be there but it's going to take appropriations, money--

Michael Grant:
It's going to take a ton of money

Boyd Dunn:
Senator Kyl has advocated several billions of dollars to help enforcement, help the federal government to provide those services; maybe you need specially-trained enforcement on the federal level and maybe even the state level to be able to deal with issues but spending that money may certainly be better than just letting the economies being affected otherwise

Jay Tibshraeny:
They need to be more pro-active, the border patrol they have to be more pro-active than they've been and maybe with the increase in manpower that president promised over a year ago, as that starts happening we'll see a little bit more pro-active work but I think there's a lot to be done herein

Michael Grant:
Okay Senator Jay Tibshraeny it's good to see you. Thanks for joining us.
Mayor body Dunn, thanks to you as well

Boyd Dunn:
Thank you, Michael

Michael Grant:
Until now laws regulating wage and hour regulations have been largely federal. But under proposition 200, passed by Arizona voters in November, Arizona has now added a state law that contains provisions different from the federal law some Arizona businesses have expressed their worries that the new minimum wage increase to 6.75 a hour imposes new regulatory burdens on employers and allows new claims by employees against employers more in a moment on the impact of the minimum wage increase on the general business community. First, Merry Lucero looks at how the increase could affect one Arizona industry

Merry Lucero:
There are 160 people on the payroll at Monti's restaurant in Tempe about 40\% of those are tipped employees, servers, busers and bartenders, coveted positions at an establishment like Monti's

Michael Monti:
People who start out as hosts often want to come up and become a bartender or server because they want to get their hands on those tips and someone who has a great personality and is an entrepreneurial spirit can really earn a lot of tips and so it is a type of job that attracts people who aren't going to hover at minimum wage, anyway they work their own raise by charming customers, selling more, charming customers.

Merry Lucero:
Michael Monti says those workers who now make 3.75 an hour plus their tips will not likely notice the 1.62 increase

Michael Monti:
That's going to go mostly to taxes or expenses and they're making so much more just turning the tables and making the customers happy

Merry Lucero:
And non-tipped employees already make more than the 6.75 per hour minimum wage

Michael Monti:
So what's happening now is perhaps we'll see a wage-pressure increase at the floor starting employees may think that they need more spread between the new minimum wage and what they're getting now and so ultimately that pressure will work its way up and maybe push up things a dollar here or there. I think the important thing is to bear in mind who's going to benefit from this the most. Now, there are people who work entry level jobs at other places may earn minimum wage they're the people who can least afford to pay more dime for a cup of coffee or a soda and ultimately, as much as we hate to pass these costs on, some of these costs will go through.

Merry Lucero:
And costs for a restaurant food supplies have substantially increased in recent years Arizona's restaurant industry employs nearly 200,000 people across the state.

Steve Chucri:
You could go to a mom and pop restaurant, an independent restaurant to a chain that has 18 locations in this state and they both are going to be impacted relatively the same way because when you look at the staffing level of those two examples I just gave you, an 18 store restaurant in this country or in this state is going to have a high number of hours that they're billing out for staffing a smaller restaurant is going to have obviously smaller hours but they're still going to have -- both are going to have the overhead costs, the cost of the food, the cost of their buildings so both are being impacted significantly and if you want to see actual numbers you're probably going to look at something of well over $1 million for a large chain in this state to 100 plus thousand for a smaller independent restaurant at the end of the day those amount to a significant increase to the costs of their business.

Merry Lucero:
He says layoffs could be another possible side effect another issue for the restaurant industry is how the new minimum wage amount will increase annually based on the cost of living

Steve Chucri:
Every year according to the consumer price index these employees will get raises, regardless of merit or performance or anything they may have done they may not have shown up for work and still they're going to get a raise and when you look at those, it's in no way going to describe how one restaurant performed over the year they could have lost money and now we're still going to be forced to give the raise the following year.

Merry Lucero:
Troublesome says Chucri to an industry with buildings that are a challenge to maintain--one that will contribute a projected $8 billion to Arizona's 2007 economy

Michael Grant:
Here to talk more about the effects of the new minimum wage increase on business generally is Glen Hamer. He is the president and CEO of the Arizona Chamber of Commerce. Glen thanks for being here.

Glen Hamer:
Thank you, Michael

Michael Grant:
We just focused there on the restaurant industry what other industries generally in the state most likely to be let's say most heavily impacted by this change?

Glen Hamer:
Well, the small business community in the state is very concerned about the effect of not only the increase but of the reporting requirements under the law as well as the potential for any employee or any individual to file a claim against an employer and the way this new law is drafted is that unfortunately it essentially brings the French judicial system to Arizona where an employer is presumed guilty of the offense until that employer is able to prove otherwise

Michael Grant:
Okay and I want to get back to that one but first let's focus a little bit more on the economic impact glen, a lot of people say hold it I just don't buy that this is that large an impact, a buck 50 or so an hour 5.15 is awfully low I think those people deserve a raise and I'm not really buying the theory that it's that big an impact on business what do you say to them?

Glen Hamer:
Well, as of a few years ago it was a very, very small percentage of workers that were paid the minimum wage and the majority of those individuals were under the age of 25 so most of the people who are making anywhere near the minimum wage are people at the beginning of their careers and it's a starting wage. What I would also say is that we've already seen that one of the reasons why the Arizona Chamber oppose the initiative was that out of concern that it would kill jobs; well, it's clearly already doing that we've already read stories about some people who are developmentally disabled receiving pink slips because of this new law, and others are now in a position where they may lose their jobs because their employers simply are not able to pay the new minimum wage and to keep operating

Michael Grant:
That issue was, as I understand it, I guess, under the federal minimum wage standard the legislature could pass some exemptions for certain people here these were the developmentally disabled working for some charitable organizations and apparently under the new state statute, that kind of flexibility is not available

Glen Hamer:
That is correct and I doubt that many voters going into the ballot booth had any idea that it could have the effect of turning out of work, of ending the ability for certain people to gain meaningful employment and because of the voter protection law in Arizona, the legislature may not even be able to -- to change that, even if it wished to do so

Michael Grant:
I think one of the other problems that people have with the loss of jobs argument basically goes as follows: let's take a fast food restaurant which frequently, maybe it's a part-time worker, a high school, college, whatever the case may be well, you still need -- you still need that worker how is it that paying that worker another buck and a half a hour eliminates a job? Because you still need the work activity.

Glen Hamer:
Well, you still need a certain number of workers but businesses also need to make a profit and a great concern for us is that if businesses cannot make a profit under this new minimum wage, it's going to turn into a situation where those businesses may no longer be able to operate and then an employee not only will not be receiving the increased wage, that employee will not be receiving a wage at all so it's not just an issue of can an employer -- why can't an employer just pay another dollar 50 or so per employee we need to remember that for businesses to operate, businesses need to -- need to turn a profit and it would just be tragic if smaller businesses are forced out of business because of this new law, particularly -- let's remember that it doesn't end at 6.75 as we saw from the other segment there's an escalator.

Michael Grant:
Inflation annually?

Glen Hamer:
An annual inflation adjuster in this and if the state goes into another economic rough patch, it's going to have an enormous effect on businesses of all sizes

Michael Grant:
Let me get to the new complaint procedures of this explain -- explain that and how it may impact business

Glen Hamer:
Well, if the goal of this minimum wage initiative was just to increase the minimum wage to 6.75, it probably could have been drafted with 100 words or 150 words instead the initiative has about 2,000 words in it and under the new complaint processes that any employee or virtually any party can file a complaint against an employer charging that that employer is violating the new minimum wage requirement the standards are, as I understand it, are very lacks

Michael Grant:
Could I as a customer of the business file a complaint against a business if I've got some reason to believe it's not paying the higher minimum wage?

Glen Hamer:
My understanding is that you as a customer or competitor could file a claim and it creates a very burdensome procedure where, as I understand it, for 90 days the employers' hands are completely tied in terms of what it does we could be in a situation where an employee is not performing or is on the verge of, for cause, being terminated and then that employee files a case -- files a suit under this new law and --

Michael Grant:
It sort of freezes that employee for three months or so while the allegation is investigated

Glen Hamer:
And again, for a smaller business to go through that legal process, it could, if the business is operating on a small profit margin, it could be a death sentence for that business and it doesn't just effect that particular employee who may be disgruntled it effects all of the employees in that operation

Michael Grant:
Who administers this complaint process? Is that a state agency that does that?

Glen Hamer:
Right now it is the Industrial Commission and they have put out some temporary regulations and they are working on permanent regulations and we will be doing everything we possibly can to make sure that the implementation of this new law, as unfortunate as we feel it may be, is done on a reasonable basis.

Michael Grant:
All right Glen Hamer, we very much appreciate you joining us this evening and Happy New Year to you.

Glen Hamer:
Happy New Year thank you, Michael

Michael Grant:
To see video of this and other "Horizon" segments via the internet please go to the website you'll find that at azpbs.org and you can click on "Horizon" you can also get transcripts, find out about upcoming topics.

Mike Sauceda:
Workers re-sod the field of the University of Phoenix Stadium after an incredible Fiesta Bowl game that is still being talked about. The sod is being laid to prepare for the B.C.S. Championship to be played at the city of Glendale stadium. Find out how stadium and city officials fared with the first bowl game and plans fort the second bowl game Thursday at 7:00 on "Horizon"

Michael Grant:
Thanks for joining us on a Wednesday evening I'm Michael Grant. Have a great one. Good night.